JPMorgan Chase has reached an agreement to acquire Renovite Technologies, a move designed to augment the bank’s merchant appeal while modernizing its payments business to address broader industry trends.
Founded in 2015, Renovite focuses on cloud-native technology, which refers to a development model that’s designed to boost scale and flexibility for cloud-delivered services. Renovite has built six payment products using this model, including payment acceptance, transaction accounting, security, card issuing, ATM support and testing.
“They specialize in low code/no code, [an easier] method of payment integrations,” said Jeremy Balkin, global head of innovation and corporate development for payments at JPMorgan Chase, at the FinovateFall 2022 conference in New York on Monday. “They’ve got very unique intellectual property and people which is really exciting.”
Renovite is headquartered in Fremont, California. It also has a presence in India and the U.K., and has provided services to JPMorgan for the past year. Terms of the deal were not disclosed.Renovite will become part of JPMorgan Payments, which houses the bank’s treasury services, trade, finance, card and merchant services.
The Renovite acquisition will also complement the bank’s proposed 49% stake Viva Wallet, which is subject to regulatory approval, and a strategic partnership with Volkswagen Financial Services, JPMorgan said in its announcement.
JPMorgan Chase’s recent purchase of a stake in the Greek fintech will allow the U.S. company to offer new services like merchant credit in Europe, where it is No. 5 among merchant acquirers.
Viva Wallet could help JPMorgan manage payments in Europe, and Viva also has a short-term merchant credit product. The Volkswagen Financial partnership is part of a strategy to take advantage of the trend toward placing e-commerce technology inside cars, as well as potential uses of the technology beyond automotive innovation, such as B2B payments.
Like most banks, JPMorgan has worked to sell payment services to merchants facing pressure from technology-focused firms such as Block, Stripe and PayPal, which combine digital payment acceptance with lending, often with repayments made based on future payment flows. The bank is also trying to differentiate itself from Fiserv’s Clover point of sale tablet.
At an investor conference in May, JPMorgan noted it was trying to improve its merchant acquiring revenue by adding more technology to serve e-commerce segments, where fintechs have been making headway.
JPMorgan has been adding technology to compete with fintech companies. In June the bank launched Chase Customer Insights, which involves sharing data on shopper’s habits obtained from JPMorgan’s consumer card spending database and card processing operations.
JPMorgan manages 93 million cards, making the bank the largest issuer in the U.S. with Citi in second at 48 million cards. JPMorgan hopes Customer Insights will be attractive to merchants that are looking for data to inform marketing, pricing and staffing in a challenging economy.
Penny Crosman contributed to this report.
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